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mminion

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Is This a Dip Buying Opportunity or the Start of a Correction?

 

On Tuesday, Lululemon Athletica (LULU) is anticipated to release second quarter EPS of $0.52 vs $0.96 last year on sales of $830.1 million compared to $883.4 million a year ago. The Co designs athletic accessories and apparel, and its expected move based on front-month options is 9.9%. The last time the Co reported earnings the stock fell 3.8%. Looking at a daily chart, the RSI is above its neutrality area at 50. The MACD is positive and below its signal line. The stock could retrace in the short term. Moreover, the stock is trading under its 20 day MA ($366.33) but above its 50 day MA ($337.61). We are looking at the final target of $414.00 with a stop-loss set at $331.00.

 

On Wednesday, HD Supply (HDS) is expected to announce second quarter EPS of $0.74 compared to $1.08 a year ago on revenue of $1.6 billion, in line with last year. The Co is one of the largest home improvement product distributors in North America and on August 11th, Clayton, Dubilier & Rice, a private-equity firm, announced an agreement with the Co to acquire its construction and industrial business known as White Cap for 2.9 billion dollars in cash. From a technical point of view, the RSI is below 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is trading under its 20 day MA ($40.69) but above its 50 day MA ($37.27). We are looking at the final target of $34.90 with a stop-loss set at $42.10.

 

On Thursday, Peloton Interactive (PTON) is likely to unveil fourth quarter EPS of $0.11 vs an LPS of $1.88 last year on revenue of $573.0 million compared to $223.3 million a year ago. The Co operates an interactive fitness platform and on September 1st, the Co announced the formation of the Peloton Health and Wellness advisory Council, which will look at how it can positively impact the physical, emotional and mental well-being of its members. On another note, the Co's current analyst consensus rating is 23 buys, 2 holds and 1 sell, according to Bloomberg. From a chartist's point of view, the RSI is above its neutrality area of 50. The MACD is positive and above its signal line. The stock is trading above its 20 day MA ($71.31) and 50 day MA ($66.78). We are looking at the final target of $112.85 with a stop-loss set at $65.29.

 

On Friday, Kroger (KR) is awaited to post second quarter EPS of $0.50 compared to $0.44 a year ago on sales of $29.6 billion vs $28.2 billion last year. The Co operates a chain of superstores and corner stores, and on August 25th, Impossible Foods' launched its Impossible Burger patties at approximately 2,000 grocery stores nationwide owned by the Co. In other news, on August 14th, Warren Buffett's Berkshire Hathaway revealed that it increased its stake in the Co by 16% to 21.9 million shares during the second quarter of 2020, according to a 13F filing with the US Securities and Exchange Commission (SEC). Technically speaking, the RSI is below 50. The MACD is positive and below its signal line. The MACD must penetrate its zero line to expect further downside. Moreover, the stock is trading under its 20 day MA ($35.64) but above its 50 day MA ($34.68). We are looking at the final target of $32.80 with a stop-loss set at $37.20.

Looking at the S&P 500 CFD on a 30 minute chart, the index turned down on September 3rd after price broke below its 200-period simple moving average (SMA) and was unable to find footing. The S&P has begun a short-term downtrend after reaching a record high of 3587.70 on September 2nd. The powerful declines and short rallies should have investors on the edge of their seats. Is this a dip buying opportunity or the beginning of a correction? The tech sector is also feeling some of the pain as shares of Tesla and Apple were the worst hit of the big names last week. Other tech stocks have also been experiencing a dip in prices. The index will likely continue to have rallies as traders play the intraday movements. However as long as price remains below its 200-period SMA, the bias is bearish. Price will probably rally back up to 3403.00, where it will meet resistance and likely be sent down to 3321.00. If price breaks below 3321.00, it could fall further to 3280.00. If price gets above 3403.00, traders should look to 3449.00 as a strong resistance level.

 

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DYOR AS ALWAYS!! it's just one of many studies!

 

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This massive market rally is due in large part to the measures taken up by the Fed since the pandemic began, Druckenmiller said. He noted that, while the central bank did a great job in March by cutting rates and launching unprecedented stimulus programs to sustain the economy, the follow-up market rally has been excessive.

 

the other side:

We never had in the past interest rates that have been this low, both in terms of the spread and the 30 year bond yield and the 10 year bond yield, said an analyst. He also argues that in a low growth, low rate world, companies that can deliver high free cash flow will be rewarded ... and that is exactly what capital lite tech companies do.

 

Between 1984 and 2009, the S&P 500 produced free cash flow as a percentage of sales of 4.7 per cent, but since 2009 this has doubled to 10 per cent.

 

The more cash you have in a slower-growing world, the more your assets are worth, he argues, adding that the relationship between free cash flow and returns (in the form of dividends and buybacks) is a strong one. Growth and technology will win versus value and old economy, he says

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From Chuck butlers daily pfennig

 

Well, the CBO (Congressional Budget Office) the guys that count the beans, said yesterday that through the 11th month of the fiscal year (August) the Federal Deficit was $3 Trillion, with another month to go…. For those of you new to class, the U.S. budget year is September to September…. That number of $3 Trillion is $1.9 Trillion more than the same period last year, and more than double the largest yearlong deficit on record, according to the CBO, who then went on to give excuses for the size of the deficit was due mainly to the costs associated with the COVID-19 virus spending…. Well, that may be some of the deficit but not all of it…. Before April began our Budget Deficit was already $743 Billion for 6 months of the budget year…. That would have been annualized to 1.486 Trillion… Still an unsightly number if you ask me! But that information was not supplied by the CBO, they simply wanted to place all the blame on the virus spending…. Which I also saw yesterday a blurb about more virus spending soon to be up for a vote… They might want to wait until Rocktober when the new budget starts…

 

Thats not a deficit, THIS is a deficit!

Mick

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ASX futures down 79 points or 1.3% to 5830 near 6.25am AEST

 

AUD down 0.4% to 72.56 US cents

On Wall St: Dow -1.5%, S&P 500 -1.8%, Nasdaq -2%

In Europe: Stoxx 50 -0.4%, FTSE -0.2%, CAC -0.4%, DAX -0.2%

Spot gold: +0.2% to $US1950.19/oz at 2.25pm NY

Brent crude : down 1.5% to $US40.20 a barrel

US oil : down 1.5% to $US37.47 a barrel

Iron ore : down 0.4% to $US126.09 a tonne

2-year yield: US 0.14%, Australia 0.21%

5-year yield: US 0.26%, Australia 0.38%

10-year yield: US 0.68%, Australia 0.93%, Germany -0.44

 

 

lots of yoyoing for a while. And these debts; does anybody care?

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yes I think the market was up over 500 at one stage when I looked overnight

pretty obvious a new down swing is starting, I reckon we will see the SP500

down to about 2500-2600 soon enough.... could be a few bargains in the offering

then .... see chart

post-10290-1599778638_thumb.png

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Not sure where to put this whinge, but I guess its a comparison between the efficiency of different markets.

On September 1st, I ordered some Oil Filters from an Aviation supplier at Brisbane Airport.

It was despatched same day by them , but according to the tracking info, it says it will be here in Central Victoria between 13th and the 18th of September.

Last week, on Friday 4th of September I ordered two lots of parts from the US.

One from Oregon, one from Kansas.

They both arrived on Wednesday 9th of September.

How is it that i can get stuff from the US within a week, but it takes two to three weeks from Brisbane?

Mick (scratching his head).

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